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'The Facebook IPO gets closer and I don’t think I can put off this valuation much longer. While we don’t have an offering price yet, the preliminary estimates are that the company will be valued somewhere between $75 billion and $100 billion. As with my Skype, Linkedin and Groupon valuations, I will present my assumptions and valuation of Facebook, with the admission that I have no crystal ball and know that your estimates will be very different from mine. So, with that disclaimer out of the way, here are my valuation assumptions for Facebook.'
Global Gains Home Fool
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Note that we have started a Facebook IPO discussion board in Fooldom. See--
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I've just read through Prof Damodaran's analysis, as well as all the comments from his colleagues and students. I'd have to say that if you read ONLY ONE ANALYSIS of the FB IPO valuation, read this one. There is a ton of pure rubbish published about this super-hyped IPO. Damodaran's analysis and the ensuing discussions/comments were refreshingly intelligent with multiple perspectives. And don't forget to play with his spreadsheet that he made publicly available as a google doc, inviting all to twiddle the numbers their way to create their own valuation. Truly helpful to the community.

- Grommet
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Thanks Grommet - glad you found it useful!

Hope you also read his latest update?

"Bottom line:

Revisiting the valuation, there is not a great deal I would change as a result of news over the last few weeks: a higher revenue growth rate (45% compounded with revenues growing to $ 56 billion) accompanied by lower margins (30%) and more reinvestment ($1.25 of revenues for every dollar invested) delivers an estimate of value that stays at the $70-$80 billion range.

I don't think that there has ever been an IPO where investment bankers have had more information (from private share market prices to institutional investor feedback) to work with, when pricing the stock, than this one. I would be very surprised, if the stock were overpriced; the bankers and the company have too much too lose. I would be equally surprised if the stock were dramatically under priced; a pop of 50% or even 25% would reflect very badly on the bankers' pricing skills. In short, this is shaping up to be a Goldilocks IPO, at least in the initial hours: a pop of about 10-15% (just right for both the bankers and the company). The question is how long the pop will last. This company is too big and too public to stage manage in the weeks after the IPO. If the pop fades quickly, perhaps even by the end of trading tomorrow, I think it is a very bad sign for the momentum game in all social media stocks.

I think that the hype is overdone, that disappointment will set in sooner or later and that the stock has far more downside than upside. You can put me in the last group (long term sell) though I am still searching for the most efficient (and least costly) way to execute this."

Always good to find a thimbleful of rationality floating in the torrent of Kool Aid :)
GG/MDP Home Fool
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